Chicago’s teacher pension fund is, says the New York Times, “dangerously close to collapse”; another may run out of money within the next decade.

The rage of public sector unions is understandable. And this debate is going to be bitter, because unlike with regular firms, there’s no clear point at which you can say, “Yes, that’s it, we all agree they’re insolvent.” While a private firm cannot (thank God) simply take more money from their customers, in theory, governments can generally raise taxes and cut other spending to pay pensions. And in theory, they should, most of the time, because the taxpayers promised those pensions through their elected representatives.

Yes, I know that this was often bad politics, not sound public stewardship. But we have to treat decisions made by elected officials as, well, decisions made by the citizens of those locales. If the citizenry can demand to renege at any time because they don’t like the outcome, government can’t function at all — not even the bits we like, like police and roads.

We can’t seize and sell off the city of Chicago to make those obligations good. And so we will argue … in court and out of it, because the fact is, many state and local governments will be unable to pay for all the promises made by the politicians of yesteryear…